Investing up to 10 years ahead of station delivery dates will deliver the highest property returns, new CBRE research suggests
Early property movers are set to benefit most from the ongoing roll-out of Sydney’s Metro rail network, a new CBRE analysis has shown.
CBRE’s Metro-fiction 2.0 report shows that population growth around already delivered Metro stations began to accelerate upwards of ten years in advance, which in turn drove outsized growth in residential rents and capital values.
On the office front, key submarkets along the Northwest line also recorded a significant uplift in rental rates and capital values well in advance of the Metro delivery date.
CBRE’s analysis highlights cumulative office rent growth in Macquarie Park, Chatswood, and Crows Nest of 31%, 52%, and 53%, respectively, in the five years leading up to 2019, with capital value appreciation of 92%, 95%, 126% over the same period.
Thomas Biglands, CBRE Associate Director of Research, noted, “These findings suggested that office occupiers clearly saw the benefits of the new Metro stations and began making leasing decisions well in advance of the Northwest line being completed. This shows that capital looking to invest near future Metro stations must have foresight and invest well ahead to capture income and capital value appreciation.”
With the Metro West line due to be delivered in 2032, CBRE’s report suggested that Parramatta will be a key office beneficiary. In tandem, the opening of the Western City Airport line is set to unlock entire new office precincts in areas such as Bradfield.
From a residential perspective, Mr Biglands said past trends would suggest that apartment value growth should accelerate along the West line over the next two years.
This was demonstrated ahead of the Northwest line and stage 1 of the City and Southwest lines opening, with apartment values in suburbs near stations growing by 76% and 57% respectively in the 10 years prior. By comparison, neighbouring suburbs further from these Metro recorded growth of 67% and 46% respectively.
In the case of the Northwest line, the widening in value appreciation has continued for the five years post-opening.
CBRE’s report tips that the hospitality and retail sectors will be among the other beneficiaries of the ongoing Metro roll-out, with daytime and night-time food and beverage spending in suburbs along the delivered portion of the City and Southwest Metro line having grown substantially.
One group already reaping the benefits as well as incorporating into its acquisition and development considerations is Sonnel Hospitality, which owns the Australian Hotel & Brewery in Rouse Hill alongside 18 other hospitality venues, most located in Western Sydney.
Sonnel Hospitality’s Chief Executive Officer Simon Meers noted, “Transport infrastructure plays a major role in shaping how people live, move and socialise, and as a business, we take a long-term view of how those shifts influence where and how we invest.”
At the Australian Hotel & Brewery, Mr Meers said the Metro has contributed to a change in foot traffic patterns, drawing in new customers from surrounding suburbs and leading to extended dwell times.
“Many of our acquisition and redevelopment projects, including the Firehouse Hotel in North Sydney, Crossroads Hotel in Casula and the Ermington Hotel have been planned with future connectivity in mind. The Metro network and Western Sydney Airport will fundamentally reshape movement across the city, and we want our venues to evolve alongside that,” Mr Meers said.
“We see ourselves as part of those planning conversations and not just responding to change but anticipating it. Investing ahead of major infrastructure delivery allows us to create well-connected hospitality hubs that will continue to thrive as these precincts mature.”
Related Articles
